CHANDLER (dpa-AFX) - Microchip Technology Inc. (MCHP), a manufacturer of semiconductor and technology licenses, Monday announced that it is intending to offer $600 million of Convertible Senior Notes due 2030 in a private offering.
The notes will be senior, unsecured obligations of Microchip, and interest will be payable semi-annually in arrears. When converted the company will pay cash up to the aggregate principal amount of the notes to be converted and pay or deliver, cash, shares of common stock or a combination of cash and stock.
Further, the company will also grant the initial purchasers of the notes an option to purchase, within a 13-day period beginning on, and including, the date Microchip first issues the notes, up to an additional $90 million aggregate principal amount of the notes.
The net proceeds from the private offering will be used to pay the cost of capped call transactions with the option counterparties. If initial purchasers exercise their option to buy additional notes, then the company plans to use portion of the net proceeds from the sale of such additional notes to enter into additional capped call transactions with the option counterparties.
The remaining proceeds will be used to repay notes outstanding under Microchips commercial paper program.
In pre-market activity, MCPH shares were trading at $75.78, down 0.30% on the Nasdaq.
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